27 November 2014
"Indicators in October 2014 showed improving signs from previous month in domestic expenditures particularly in private consumption, private investment, and public expenditure. External demand as reflected by exports also expanded. For the supply-side indicators, agricultural sector showed contraction, while the number of inbound tourists showed the first expansion in 10 months."Mr. Krisda Chinavicharana, Deputy Director-General of the Fiscal Policy Office, acting Spokesperson of the Fiscal Policy Office revealed that "Indicators in October 2014 showed improving signs from previous month in domestic expenditures particularly in private consumption, private investment, and public expenditure. External demand as reflected by exports also expanded. For the supply-side indicators, agricultural sector showed contraction, while the number of inbound tourists showed the first expansion in 10 months."
Private consumption in October 2014 showed improving signs. This was reflected by real VAT collection at constant price in October 2014, which contracted by -1.7 percent per year, but expanded by 2.8 percent per month after seasonal adjustment. Likewise, motorcycle sales in October 2014 decreased by -7.6 percent year-on-year, but increased by 0.9 percent per month after seasonal adjustment. Consumer Confidence Index in October 2014 increased from 69.2 points last month to 69.6 points. This was due to consumers' confidence in the government's economic stimulus package, and a decline in gasohol price leading to a reduction in living costs.
Private investment in October 2014 showed improving signs in machinery sector. This was reflected by commercial car sales. The commercial car sales declined by -13.6 percent year-on-year, but increased by 0.8 percent per month after seasonal adjustment. For the private investment in construction sector, cemen sales in October 2014 contracted by -5.7 percent year-on-year, but increased by 0.4 percent per month after seasonal adjustment. However, real estate tax collection in October 2014 contracted by -4.4 percent year-on-year and by -8.6 percent monthon-month. The reason was that the stream of information related to inheritance tax already accelerated real estate transaction in September 2014, resulted in the expansion in real estate tax collection by 16.1 percent year-on-year in September 2014.
Public expenditure showed acceleration. In October 2014, the total budget disbursement was recorded at 367.6 billion baht, which expanded by 42.3 percent per year and accelerated from the contraction in previous month, which declined by -2.3 percent per year. This reflected that the government was one of driven factors that supported economic expansion. The budget disbursement for the first month of FY2015 amounted at 344.8 billion baht or 13.4 percent of FY2015 expenditure framework (2,575.0 billion baht). This amounts comprised of (1) current year expenditure of 330.0 billion baht, which expanded by 36.7 percent per year and (2) capital expenditure of 14.8 billion baht, which expanded by 449.6 percent per year.
External demand reflected by exports in October 2014 showed a continued expanding sign in the second consecutive month or the highest expansion in 21 months. The exports expanded by 4.0 percent per year, and increased by 4.7 percent per month. This was due to the increasing exports in agricultural products, sugar, automobile, and electronics.
Ms. Kulaya Tantitemit, Executive Director of Macroeconomic Policy Bureau, further elaborated that supply-side indicators showed contracting sign in agricultural sector, while the number of inbound tourists showed the first expansion in 10 months. Agricultural Production Index (API) in Octobet 2014 decreased by -3.4 percent per year and by -5.5 percent per month. This was due to droughts during the beginning of the year. Therefore, farmers reduced the secondround planting of out-of-season rice corresponding to the decrease in tapioca products, which was harvested from previous. For the service sector, the number of inbound tourists in October 2014 showed the first expansion by 6.1 percent per year in 10 months, and increased by 12.3 percent per month. This was due to the confidence of tourists in domestic situation. Furthermore, the number of inbound tourists from China highly expanded by 67.0 percent per year. This was due to the exemption of visa fees for holders of Chinese and Chinese Taipei (Taiwan) passports from 9th August to 8th November 2014.
Internal and external stabilities remained robust reflecting the resilient ability to risk from the volatilities in global economy . In October 2014, headline inflation stood at 1.5 percent per year lower than that of previous month, which was 1.8 percent. This was due to a reduction in crude oil price in world market, which showed a continually decreasing trend. This affected the restructuring of retail gas prices. The unemployment rate in October 2014 was low at 0.8 percent of total labor force or equivalent to 289,000 unemployed persons. Likewise, external economic stability remained robust, as indicated by high-level of international reserves at 160.6 billion USD, or approximately 2.8 times of short-term external debt.
Source: Fiscal Policy Office / www.fpo.go.th